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Program 0044
October 31, 2000

This text has been professionally transcribed. However, for timely distribution, it has not been edited or proofread against the tape.

Felix Zumelzu: In the case of Argentina we’ve had the Asian crisis; there’s the Russian crisis, etc.; the Brazilian devaluation. So the IMF helps you regain credibility in the markets and also gives you financial assistance if necessary.

KRISTIN MCHUGH: This week on Common Ground, labor and beef in Argentina.

Dr. Pilar Garcia: Argentine or any kind of grass-fed beef has less amount of fat. Has less amount of intermuscular fat. And then has less amount of cholesterol. With the general tendency to eat less fat is a good quality.

KEITH PORTER: Common Ground is a program on world affairs and the people who shape events. It’s produced by the Stanley Foundation. I’m Keith Porter.

MCHUGH: And I’m Kristin McHugh. For years the Argentine government and trade unions maintained an uneasy alliance. Governments headed by the Peronist Party allowed the unions a certain amount of power and union leaders didn’t disrupt the economy. With the election of opposition President Fernando de la Rúa last year, that’s all changed. Unions have held two national strikes this year, saying they want to protect workers from the ravages of globalization. Employers say the unions are blocking free market reforms that will increase employment and improve standards of living. Common Ground Special Correspondent Reese Ehrlich

reports from Buenos Aires.

[sound of an announcer speaking on a public address system at a bus station]

EHRLICH: All is calm here at the Retiro bus station as thousands of passengers take off for a busy weekend. But only days before no buses had left the station. Angry bus drivers from a corporation called the International Company blocked Retiro’s entrances because they hadn’t been paid for three months.

EHRLICH: A few blocks away from the bus station, vigilant bus drivers from the International Company huddle against the cold. They sit inside an old city bus converted into a makeshift shelter. A camping-type stove produces a little warmth and enough heat to boil water for their mate tea. Jorge Bierne is an International Company bus driver.

JORGE BIERNE: [via a translator] We haven’t worked for three months. On Thursday we held a strike because they hadn’t paid us. Four hundred employees went on strike. Right now we’re all out of work.

EHRLICH: After the strike the federal government forced another company to take over the International Company and pay workers back wages. This was just one in a series of labor disputes impacting the new government of President Fernando de la Rúa. Elected in October 1999, de la Rúa inherited a two-year-old economic recession, 15 percent unemployment, and a deteriorating standard of living for working people. Striking bus driver Javier Randaso says that de la Rúa, far from correcting the problems, has made them worse.

JAVIER RANDASO: [via a translator] The situation of the worker here in Argentina is very bad. People with money do well. But the worker and people in the middle class are losing out. People trying to own a small house, working people, are facing much worse living conditions: higher taxes, salary cuts, unemployment-those are the policies of de la Rúa. They seem to be just the same policies as before.

EHRLICH: Unlike some developing countries, Argentina has an industrial base and relatively high salaries. But local companies have been undercut by cheaper products shipped in from abroad. Randaso argues that’s the direct result of US pressure to open up Argentina’s markets.

RANDASO: [via a translator] Here in Argentina we’ve got a lot of factories, small factories, many textile factories, auto factories. We have a lot of work for people. When more goods come in from other countries the number of jobs here goes down. The people who don’t have jobs, they will work for anything, for very low pay, for just a chance to eat.

EHRLICH: Workers blame their problems on greedy employers, the Argentine government, and the International Monetary Fund. The IMF makes loans to Argentina contingent on tight fiscal austerity. Randaso says that means higher taxes, fewer social services, and wage cuts for working people.

RANDASO: [via a translator] All our presidents are pressured by the IMF. Whenever the IMF wants to change the clause in an agreement, they change it. They are always against the worker. The people here with a lot of money always benefit from the IMF policies.

EHRLICH: Julio Piumato, a top leader of the General Confederation of Labor, says Argentine workers think the IMF is part of the problem, not part of the solution.

JULIO PIUMATO: [via a translator] The crisis of unemployment is a structural problem. We need major changes. In the last few months the heads of the IMF and World Bank have announced programs to fight poverty in the underdeveloped world. But their policies haven’t fought poverty. They have increased it. It’s impossible to be competitive on the world market in the way they want, even if Argentine workers worked for free.

EHRLICH: Not surprisingly, Argentine corporations see IMF policies in a somewhat different light.

Felix Zumelzu: It’s been a very positive contribution. And I think sometimes it’s not recognized as it should, but it is.

EHRLICH: Felix Zumelzu is Executive Director of the American Chamber of Commerce, which includes many Argentine as well as American companies.

Felix Zumelzu: What the IMF does is intervene when countries get into financial difficulties, basically because there’s an external crisis, which there’s been success of. In the case of Argentina we’ve had the Asian crisis; there’s the Russian crisis, etc.; the Brazilian devaluation. So the IMF helps you regain credibility in the markets and also gives you financial assistance if necessary. To do that it essentially establishes with you, with your agreement, the kind of conditions that you’ll have to meet in order to get this assistance. Which are, you know, essentially doing things properly. In the case of Argentina, the emphasis has been in following a strict fiscal policy. It is essential for Argentina to essentially maintain a balanced budget.

EHRLICH: International lending agencies have also long pressured Argentina to change its labor laws. Under the late President Juan Peron and subsequent Peronist governments, unions were allowed a certain amount of power in return for supporting the government. If employers and unions couldn’t reach agreement on a contract, for example, the previous contract automatically continued with cost of living increases added on. An estimated 60 percent of the workforce is unionized, one of the highest rates in the world. De la Rúa’s government, which is led by parties opposing the Peronists, passed a labor reform law earlier this year that considerably weakens unions. Instead of just extending old contracts, employers and unions must now submit to binding arbitration. The new law also allows local rather than national bargaining. Zumelzu says that will likely result in lower wages.

Zumelzu: This has been going on in private business for some time now.

EHRLICH: Lowering salaries?

Zumelzu: Yes. Yes. And this is the kind of thing that you have when you negotiate at a local level. Because you can discuss a very specific issue. We have to continue our exports to Brazil, for example. How do we do that? And in some cases people have sacrificed and have accepted salary reductions.

EHRLICH: The government led the way by cutting salaries 10 to 15 percent for some government employees. De la Rúa says the cuts are necessary to reduce government deficits and avoid firing large numbers of civil service employees. But the decision caused a firestorm of protest by government workers.

[sound of a street demonstration]

EHRLICH: Unionized state workers have staged a series of marches and demonstrations to protest the wage cuts.

[sound of a street demonstration]

EHRLICH: Mariana Sanchez, a government office worker, says she’s demonstrating not only for herself, but for other workers as well.

MARIANA SANCHEZ: [via a translator] We’re here because we’re fighting on behalf of the whole working class. They’re cutting wages. But the cost of living is very high. We need higher salaries, not lower ones. It’s unjust. There’s too much unemployment here. Every day on the way to work I see people who have no jobs, who can’t live.

EHRLICH: Two lower courts have ruled the state worker’s wage cut unconstitutional because de la Rúa issued a decree rather than submitting the issue to Congress. The Supreme Court is expected to rule soon on the constitutionality of the president’s actions. The government’s labor policies stirred even more controversy after senators were accused of accepting bribes in order to pass the de la Rúa labor reform law. Though charges are being investigated by a government agency.

[sound of a street demonstration]

EHRLICH: De la Rúa’s attacks on unions have led to a split in the Peronist-dominated General Confederation of Labor, or CGT. One group advocates compromise with the government. Another more militant group has decided to fight. It called two very successful general strikes, as well as other actions. Julio Piumato is a top leader of the more militant group, known as CGT-Rebelde. Piumato says Argentina hasn’t seen such labor unrest for many years.

PIUMATO: [via a translator] This economic situation is new for Argentina. We were poor, but we weren’t impoverished. We have schools. We have skilled workers and decent jobs. Over the last years employers say they’ve modernized the economy. But in reality they’ve destroyed the economy by opening borders and allowing easy import of foreign goods. By maintain an artificially high exchange rate between the dollar and peso, it’s almost impossible for local industry to export their products.

EHRLICH: Piumato’s criticisms of globalization sound very similar to those raised by protesters in Seattle last year and in Washington, DC, earlier this year. Indeed, trade unionists here took heart from those demonstrations.

PIUMATO: [via a translator] When US workers protested in Seattle and Washington, along with nongovernmental organizations, they were demanding a fair deal for countries of the South. Workers of the North respect us and demand that investments from developed countries should improve our wages, working conditions, and help protect the environment.

EHRLICH: Like the trade unionists in Seattle, Argentine union leaders have tried to form alliances with environmentalists, nongovernmental organizations, and human rights groups, such as the Mothers of the Plaza de Mayo.

[sounds of a street demonstration]

EHRLICH: Every Thursday afternoon for the past 23 years, people have demonstrated here in the Plaza de Mayo. A group of mothers, dressed somberly and wearing white scarves, protest the disappearance of their children, many of whom were kidnapped and murdered by the military during the Argentine dictatorship of 1976-1983.

[sounds of a street demonstration]

EHRLICH: Evel Petrini is a top leader of the Mothers of the Plaza de Mayo.

Evel Petrini: [via a translator] Yes, we supported the general strike. That was a worker’s demonstration. They were fighting not just for themselves but to end the huge unemployment we have in this country. This labor reform law is a terrible thing. But the unions are little late. During the previous presidential administrations they allowed the government to take away people’s rights and shed blood. They did nothing. It’s good that they are struggling now. Unfortunately, in the minds of many these leaders don’t act like real progressives.

EHRLICH: Petrini raises a dicey issue for union officials. For many years union leaders were closely associated with Peronist governments. They rarely called strikes and shunned alliances with other groups. Leaders of the CGT-Rebelde, the militant union federation, say that’s changing now. Eduardo Constantino, a leader of the Teamster’s Union, which is affiliated with the CGT-Rebelde, concedes the current economic crisis began with the Peronist government of the previous President, Carlos Menem.

EDUARDO CONSTANTINO: [via a translator] We oppose the economic and political situation we’re living in today that began under Menem. We also oppose the policies of the current government. Apparently not all the unions have this position. Some CGT leaders still have ties with the government. Now with the split in the CGT, a more progressive and militant leadership is emerging. That should lead to better ties with NGOs and human rights groups.

EHRLICH: Employers are worried about this new militant tendency in the union movement. They say unions must cooperate with employers and the government in order for Argentina to remain competitive in the global economy. If unions are too strong and wages too high, it discourages investment, says Daniel Funes De Rioja, a labor attorney representing major Argentine corporations.

Daniel Funes De Rioja: The question of employment, the question of growing, the question of giving Argentina the chance, the possibility to improve their productivity, their capacity to compete at a global level, is much more important than to try to solve this dispute with a strike, because with a strike you don’t obtain any good result.

EHRLICH: Labor leader Julio Piumato says arguments about global competition are a smoke screen.

PIUMATO: [via a translator] Those arguments about competitiveness are a distraction to take away attention from their policies of attacking workers. It’s not a question of becoming more competitive; salaries are a very small part of the overall cost of production. In public services, like electricity, natural gas, etc., the cost of investment is very high. Labor accounts for only 10 percent of the cost of building a car; 75 percent is the cost of materials and financing. This statistic is the same for any industry you want. If the government doesn’t change its policies then we will have more general strikes. We’ll continue to struggle for change. We are fighting for our dignity. We don’t know when the government will start a dialogue.

EHRLICH: In response to labor unrest, the government has promised to create public works projects and provide welfare benefits for the unemployed. But as long as the current recession continues unemployment is likely to stay high.

[sounds of the public address system at the bus station]

EHRLICH: Back at the Retiro bus station passengers scurry to get on buses. A bus idles while passengers get on board. Although bus drivers make far better wages than many Argentine workers, they are among the strongest supporters of the militant CGT union federation. Bus driver Oscar Bernar.

OSCAR BERNAR: [via a translator] I participated in the June 9th national strike because of the whole situation in this country, with low salaries and high unemployment. Yes, we make good money compared to others. It is one of the better salaries. But when we went on strike it was not just for ourselves. I personally lost money by striking. But we did it to lower unemployment and stop attacks on other workers. I’d do it again if necessary.

EHRLICH: If the views of this bus driver represent that of other workers then Argentina will continue to undergo labor unrest for many months to come. For Common Ground, I’m Reese Ehrlich, in Buenos Aires.

MCHUGH: Coming up, Argentina’s beef trade,

Felix Zumelzu: The US is pretty protectionist when it comes to agricultural products, basically. That’s, and of course you’re a very large agricultural producer. But you shouldn’t be afraid of low-cost producers such as us. To, and allow us to compete.

PORTER: Argentina has long been one of the world’s major beef exporters. Because Argentine cattle eat grass in natural pastures, without being fed growth hormones or other chemicals, cattleman there say they produce a healthier and more environmentally friendly meat. Yet US consumers see almost no Argentine beef on supermarket shelves. Common Ground‘s special correspondent Reese Ehrlich traveled to Buenos Aires to find out why.

[sound of people at a restaurant]

EHRLICH: Argentines take their meat very seriously.

[sound of people at a restaurant]

EHRLICH: The waiter at this local restaurant explains that they have a full array of meat: grilled steak, sausages, sweat breads, and almost every other part of the steer. Argentines love the taste of their beef and get very serious about how the meat is cooked.

THIERRY GRODET: This is the main kitchen where we do all the meal for the mediteraneo.

EHRLICH: Thierry Grodet, Executive Chef at a major Buenos Aires restaurant, says his customers tend to favor enormous slabs of beef.

EHRLICH: When people order a beef here at the restaurant, what is the favorite for your customers?

THIERRY GRODET: For the favorite of the customers it is the tenderloin or the strip loin. I mean the strip loin, the New York strip.

EHRLICH: How would you describe the flavor of the beef here?

THIERRY GRODET: The flavor of the beef is very different in the sense that you have not that grease that you have in the States or New York. It’s a beef that is very, it’s not greasy at all.

EHRLICH: It’s lean.

THIERRY GRODET: It’s very lean. It’s what makes it taste very, very different.

EHRLICH: Is there a way to describe it, the taste?

THIERRY GRODET: A way to describe it. I don’t know. [laughs]

[sound of meat sizzling on a grill]

EHRLICH: The “parilljero,” or “grilled meat chef,” uses no sauces or flavorings. He only throws a little salt on the slabs of meat as they sizzle on an open grill, called a “parilla.” Grodet, who is French, explains how it works.

THIERRY GRODET: They do it with olive wood or they do it with charcoal. The flame will never touch the meat. And after, they can move the grill up and down. If the heat it is too strong, it will go up, and if the heat is not strong enough it will go down. And for them it is really like a sport of the Sunday.

[sound of a clanging bell]

EHRLICH: Before the meat is ever cooked or even butchered the steers come here, to the world’s largest cattle auction house, the Mercado Liniers. Jorge Rodriguez, is spokesperson for the cattle auction.

JORGE RODRIGUEZ: [via a translator] That bell announces to the buyers that there will be an auction. It’s the kind of bell used in a monastery. The auction is to begin at 7 a.m. The price is determined supply and demand. The buyers come from supermarkets, slaughterhouses, and cattle companies.

EHRLICH: The beef buyers crowd around an auctioneer trying to get the best price for the steers on the hoof.

[sounds of an auction]

EHRLICH: Argentine cattle ranchers and meat packers say with pride that their export beef is raised in open pastures, not in feed lots. Years ago they decided it was cheaper to feed the cattle on grass than to pay high prices for feed grains. But now they realize that grass-fed beef appeals to health-conscious consumers abroad. Cattle ranchers add no artificial chemicals to the feed, nor have they experimented with gene splicing or cloning. Ruben Gonzalez heads Argentina’s trade for meat processors.

RUBEN GONZALEZ: [via a translator] The meat exported by Argentina all comes from cattle fed in natural pastures. Argentine cattle production doesn’t use any kind of hormones, estrogen, or antibiotics that will accelerate the growth of the cattle. Our beef is 100 percent natural.

EHRLICH: In August a small group of cattle infected with hoof and mouth disease wandered across the border from Paraguay into Argentina. While hoof and mouth disease isn’t dangerous to humans, it can infect and kill other cattle. So the US temporarily stopped imports of fresh Argentine beef. Cattle producers here argue that the outbreak is limited and will be quarantined quickly. In general, scientists here say Argentine beef is leaner, so it doesn’t have many of the unhealthy qualities of US beef. Dr. Pilar Garcia, a biochemist at the government’s National Institute of Agriculture, says a slice of her country’s beef has about the same amount of cholesterol as a skinless chicken breast of the same weight.

Dr. Pilar Garcia: Argentine or any kind of grass-fed beef has less amount of fat. Has less amount of intermuscular fat. And then has less amount of cholesterol. With the general tendency to eat less fat is a good quality. Because we have a very lean beef, but very tasty.

EHRLICH: Dr. Garcia, who worked for US beef manufacturers for many years, says most of the hormones used in US feedlots are safe for consumers. They become dangerous, she says, when overused.

Dr. Pilar Garcia: All of these kind of supplements, if they are not natural, there is a danger for the health. And then it’s necessary to, if you are going to use it, use it in the correct way. Some kinds of drugs, they produce tumors in rats and in animals, laboratory animals. So you need to be careful with these kind of things.

EHRLICH: Some Argentine steers raised for domestic consumption also end up in feedlots during the last 30 days of their growth. That’s given rise to a small but growing organic cattle industry. Organic farmer Inaki Flores says his cattle never go to feedlots.

Inaki Flores: No, we do it with, with basically with pasture. We are allowed to use only 25 percent of the diet, of the animal, that can be grain. Not more than 25 percent.

EHRLICH: These farmers raise organic crops as well as cattle. Flores Pulls out a large chart that shows how each piece of land on his 2,200 hectare ranch is rotated. Some years he grows organic onions. Then alfalfa. Then cattle graze on that piece of land. Then it lies fallow. In this way, says organic farmer Gonzalo Roca, they avoid the need for chemical fertilizers and insecticides.

Gonzalo Roca: [via a translator] We have a system of rotation for the cattle. We rotate where the cattle graze each year. This system is sustainable both environmentally and economically. This fits with our level of technology very well. It helps the environment.

EHRLICH: Another organic cattle rancher, Enrico Cresta, says Europeans in particular are very interested in buying organic Argentine beef.

Enrico Cresta: [via a translator] In the last year we’ve seen a big leap in interest in organic beef. Specifically a big English supermarket came here and asked if we could supply all their organic beef. It would mean 100,000 head of cattle per year. Our production now is only 10-15,000 head. We can’t provide it. We need two to five years to ramp up production.

[sounds of people at a market]

EHRLICH: Whether organic or not, Argentine beef is a whole lot cheaper than anything available in the US. Here at a Buenos Aires market, a high quality steak costs only $1.70 per pound.

[sounds of people at a market]

EHRLICH: If Argentine beef is so healthy and inexpensive, why don’t American consumers see it in the supermarket. Well, the answer is a bit complicated. For a number of years a few herds in Argentina were infected with hoof and mouth disease. Citing that as the reason, the US excluded all Argentine beef. Cattleman Roca says that was just an excuse.

ROCA: [via a translator] No Argentine beef was allowed into the US at a time when many tons of our beef was exported to Europe. We shipped them deboned beef, which is free of hoof and mouth disease. We have very safe and very high quality beef. That’s recognized in Europe.

EHRLICH: Indeed, for many years the US also excluded beef from New Zealand and Australia, which had no problems with hoof and mouth disease. Argentines say the US is protectionist when it comes to imports. And that’s confirmed by a surprising source: Felix Zumelzu, Executive Director of the American Chamber of Commerce in Buenos Aires.

Felix Zumelzu: You have quota. And they can’t go, we can’t go beyond that quota. Actually, the US is pretty protectionist when it comes to agricultural products, basically. That’s, and of course you’re a very large agricultural producer. But you shouldn’t be afraid of low-cost producers such as us. To, and allow us to compete. I think it’s a question of keeping the pressure on and trade is like that now. You have to work on it. And basically I think the, the administration has a positive attitude towards this now. But, politics is politics.

EHRLICH: So essentially the beef producers or some farmers have a strong enough lobby in Washington where they can keep out foreign products. I mean, is that what it comes down to?

ZUMELZU: Yeah. Pretty much so.

EHRLICH: For the last several years Argentina and other countries have been allowed to import into the US 20,000 tons of beef, a small fraction of US beef consumption.

[sound of cattle being driven]

EHRLICH: Back at the Mercado Liniers cattle auction, gauchos expertly maneuver their horses to herd cattle into pens. Most of the beef here will end up on the plates of Argentine consumers. But as Trade Association head Gonzalez says, North American beef eaters could also benefit if the US government lowered protectionist barriers.

GONZALEZ: [via a translator] In the future we want a more open market that will permit the import of everything we can produce, and that US consumers want to buy. We understand that part of the quota is not used by Australia and New Zealand. We’d like to fill that unused portion. With greater competition, prices would drop for US consumers.

EHRLICH: Greater competition would lead to lower prices. Funny, that sounds just like what the US government tells the rest of the world. For Common Ground, I’m Reese Ehrlich, in Buenos Aires.

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